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Oprah has left WeightWatchers, sending stocks spiraling and spelling doom for the diet of our foremothers

Mia de Graaf,Gabby Landsverk,Rachel Hosie   

Oprah has left WeightWatchers, sending stocks spiraling and spelling doom for the diet of our foremothers
  • Oprah Winfrey isn't seeking reelection to the board of WW International, known as WeightWatchers.
  • The announcement sent WW's stock price tumbling 25% on Thursday morning.

Oprah giveth, and Oprah taketh away.

The media maven who helped breathe fresh life into WW International, known as WeightWatchers, has announced she's stepping down from their board after nearly a decade.

Winfrey's departure, announced in a Securities and Exchange Commission filing, sent the company's stock tumbling a staggering 25% on Thursday morning.

Long term, the move potentially spells serious issues for the 60-year-old diet company's relevance today. WW was once the weight-loss standard for many people, particularly women. In the age of Ozempic, it feels like an outdated operating system.

The "Oprah effect" was a boon for WW

Winfrey has been something of a kingmaker in wellness trends for almost 40 years.

The so-called "Oprah effect" was coined by analysts to name a remarkable trend: Pretty much every product she endorsed on "The Oprah Winfrey Show," which aired from 1986 to 2011, saw a huge spike in sales almost overnight.

The same was true for WeightWatchers. Winfrey joined in 2015, buying 10% of the company's shares and signing on as a face of the program. It was a surprising time to jump on board — WeightWatchers had been shedding users, and its stock price was dwindling. Within three years, the company was worth 13 times more. Reporting on WeightWatchers' new-found value in 2018, the Guardian said it was "probably the biggest example of the Oprah effect."

WW (the company rebranded to an acronym in 2018) even benefited when Winfrey disclosed to People Magazine last year that she used a weight-loss drug to shed pounds rather than a WW-style diet.

Despite not naming the brand, there was an immediate spike in demand for GLP-1 medications — the popular new class of drugs for weight loss. Zocdoc, a site for booking doctor appointments, had a 30% spike in people trying to book appointments to get semaglutide (sold under the brand names Ozempic and Wegovy), Axios reported. That same day, WW added a weight-loss-drug arm to its business, acquiring Sequence, a service that provides drugs for weight loss. Soon after, shares in WW soared 10%, MarketWatch reported.

Diet culture has changed

Winfrey's notable impact on an already booming weight-loss-drug trend solidified a clear shift in the world of weight management.

WW pioneered what's known as the "traffic light" system — categorizing foods and drinks into different colors (red for bad, yellow for OK, green for good) to help people cut calories systematically.

In recent years, companies have been pivoting away from traditional calorie-shaving diet plans like rats fleeing a sinking ship. Instead, they have been charting a path toward more attractive, reliable prospects that seem to fit into anyone's lifestyle, such as weight-loss medications. Weight-loss startups such as Noom and even hospitals, including the Mayo Clinic, have all followed this trajectory, phasing in diet programs that prioritize consumer interest in GLP-1 medications.

At the same time, the general public is becoming more educated about weight, weight control, and obesity. There's now a more widespread understanding of the idea of "food noise" and the influence of hormones and genetic factors on our weight. Obesity was, until recently, perceived as an issue of lifestyle and willpower. Doctors told Business Insider that now, their patients were increasingly seeing it as a medical disease.

In that context, the traditional "just eat less" method feels outdated.

What are the short-term impacts of Winfrey leaving WW?

Winfrey leaving — giving her remaining shares to the Smithsonian's National Museum of African American History and Culture — is certainly a huge blow to the company.

It takes a long time to recover from the Oprah effect, positive or negative. In 2016, Oprah announced she had lost 40 pounds on WeightWatchers. The stock price soared 170% in two days and was elevated for more than a year. The price returned to a normal level only about 14 months later, Forbes reported.

Long-term, WW needs to find a new identity

Over time, WW is set to benefit from being a purveyor of hard-to-access drugs for weight loss. Ozempic, Wegovy, Mounjaro, Zepbound — these drugs are not easy to access. While you can get GLP-1 drugs for weight loss at med spas or from compounding pharmacies, they're not the same thing, and it's unclear what ingredients those versions contain, as BI previously reported.

As for WW's core business of diet and lifestyle, it may cater to people on weight-loss drugs looking for a new eating plan to maintain their weight loss.

Is that enough? Some market analysts say the fact WW has been growing in subscribers lately is reason for optimism for WW investors. Others have been more cautious. "I've been covering WW for about 10 years, and there has never been anything like this," the Craig-Hallum analyst Alex Fuhrman told CNBC. "It's all unfolding in real time."

The double whammy of Winfrey's GLP-1 use and withdrawal from WeightWatchers is the latest signal that smaller meals and aggressively tallying calories and grams of fat are fast becoming ghosts of diets past. We're not free from the clutches of diet culture — an Ozempic world carries the same psychological toll as the Atkins universe of old — but it's evolving into something new.

WW is no stranger to trying to bend its brand to the shifting whims of the wellness industry, with varying degrees of backlash. In 2018, the company spent $3 million on Kurbo, a diet app for kids. That same year, it added a new tagline, "wellness that works" — without changing the structure of the diet routines offered to consumers, as Slate reported at the time.

But in three years, WW has gone from being profitable to not. It's unclear whether the pivot to weight-loss pharmacy will be the Oprah Effect 2.0 it needs.